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Young Canadians and Their Confidence in Financial Knowledge

When exiting high school, young Canadians must begin their journey to learning how to manage their time as well as their finances to prepare themselves for the journey of adulthood.
Author: The Drive Magazine
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By Madeline McCallum

When exiting high school, young Canadians must begin their journey to learning how to manage their time as well as their finances to prepare themselves for the journey of adulthood. For optimum control over their financial lives, Canadians need to be knowledgeable about financial options and be engaged in their financials. Many students are not confident in their financial knowledge, yet do not know where to begin when seeking help. The best way to close the knowledge gap among young Canadians is to further educate students at a young age through high school courses, and parental influence. Young adults reporting family and relatives as their main source of learning about finances were found to have poorer knowledge about finances in general than those who have taken courses concerning their finances.

Finances are the one thing that causes the most stress amongst Canadians. Mental and physical illnesses are often a result of stress in relation to finances. Due to the financial burden that young Canadians face, especially those departing from high school, many are at a higher risk of developing health concerns than those with a strong sense of finances. Young Canadians are in constant battle with their finances, according to Linda Spencer from Insight Blog, fewer than 35% of students feel confident enough to manage their finances. This means that due to a small portion of young Canadians having a strong knowledge of their finances, the 65% of Canadians left will be faced with stress and anxiety.

A strong reason why young Canadians are uneducated about their finances is due to their lack of knowledge as to what to do with their finances, how to do basic transactions, and what is needed to be completed. The best way to effectively close the gap between those that are confident in their knowledge about their finances and those that are struggling is to teach students in high school how to deal with their finances. An example of what to teach students is to show students how to do their taxes, what taxes are, and the importance of doing them. Understanding how taxation works can give you a stronger sense of the ways your income gets taxed, giving you more power over how to control your money and finances. Another way to reduce the knowledge gap in finances is for parents to allow young adults to open savings accounts. By doing this, your child will start saving money and be able to deposit their income into the account once they start to work. The final way to help young Canadians with their knowledge of finances is for parents to teach their children how to pay bills and how to file a tax return. Doing this one time will increase their confidence and knowledge for the next time coming. It will also allow the child to have an idea of what they need to do for their finances.

Over the past several years, banking has become more efficient and easier to do. Yet the struggle to understand what finances are and how to properly do them is a common occurrence amongst young Canadians today. Struggling to understand taxes, money and what is needed to be completed causes stress among young Canadians which leads to health risks. The most effective way to educate young Canadians about their finances is to teach them how to do so within their high school career, have students help their parents do their finances, and open savings accounts. This will stop the feeling students get of wasting their time learning things that they believe they will never use and help boost confidence concerning their finances. In closing, if Canada can close the gaps regarding the lack of knowledge regarding finances, then students and young Canadians will benefit.

References

Shariff , Shariff. “Six Ways to Increase Financial Literacy in Canada’s Youth.” People Corporation – Experience the Benefits of People, People Corporation , 15 July 2021, https://www.peoplecorporation.com/information-centre/all-articles/six-ways-to-increase-financial-literacy-in-canadas-youth.

Kenown, Leslie-Anne. “The Financial Knowledge of Canadians.” Statistics Canada, 8 March 2011, http://en.copian.ca/library/research/stats/financial_knowledge/financial_knowledge.pdf

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